Update #1 at 09:45 UTC: The bank seems to have pulled the exchange’s landing page, which suggests that the official launch is not quite ready yet.
Update #2 at 15:00 UTC: A DBS spokesperson has confirmed to CoinDesk that “DBS’ plans for a digital exchange are still work in process, and have not received regulatory approvals.”
Singapore-based DBS Bank, the largest bank (by assets) in South East Asia, is planning to launch “DBS Digital Exchange”, a bank-backed digital exchange.
DBS Digital Exchange, which will be regulated by the Monetary Authority of Singapore, will backed by the leading Asian financial services group DBS Bank. It will provide trading services “from fiat currencies to four of the top digital currencies in circulation – Bitcoin, Bitcoin Cash, Ether, and XRP.”
However, it is important to point out that this platform is not aimed at retail investors:
DBG Digital Exchange only accepts financial institutions and professional market makers as members. Individual investors can only access the exchange via a member…
Here is what is special about the DBS Digital Exchange — it will not hold any cryptoassets. Here is DBS explaining this idea:
Unlike most digital exchanges today, DBS Digital Exchange does not hold any digital assets. Instead, all digital assets are kept at DBS Bank, which is globally recognised for its custodial services. To keep customers’ digital assets safe, DBS Bank has deployed DBS Digital Custody, an institutional-grade custody solution specially tailored for safekeeping digital assets.
These are the trading pairs that will be supported by the platform:
BTC/SGD | BTC/HKD | BTC/USD | BTC/JPY, BCH/SGD | BCH/HKD | BCH/USD | BCH/JPY, ETH/SGD | ETH/HKD | ETH/USD | ETC/JPY, XRP/SGD | XRP/HKD | XRP/USD | XRP/JPY
The total exchange fees will be 10bps. The order types that will be supported are “Market, Limit and FAK (Fill-and-Kill).”
DBS Digital Exchange also plans to support security tokens (which are “listed cryptographic tokens backed by real assets such as equities, physical properties, fixed income instruments, and even fine art”)in the future.
Su Zhu, Co-Founder, CIO, and CEO of Singapore-based crypto-focused hedge fund Three Arrows Capital, says that this will “become the easiest on-ramp for those who bank in Singapore”:
And Changpeng Zhao (“CZ”), Co-Founder and CEO of crypto exchange Binance called this move by SBD “a step in the right direction”:
On August 17, DBS Bank published a research paper titled “Digital Currencies: Public and Private, Present and Future”.
In this paper, Dr. Taimur Baig (the bank’s Chief Economist) and other six co-authors wrote that “this year is shaping up to be a landmark in the history of digital finance” and that “the ongoing pandemic has added fuel to the move toward a society with less cash dependence.”
Here is how the paper explained the appeal of cryptocurrencies:
“Cryptocurrencies can be used in various contexts where conventional money accounts are somewhat disadvantaged.
“First, given that the cryptocurrency network is borderless, it is straightforward to wire cryptocurrency payments across countries.
“Secondly, the cost of transactions can be minimized for overseas purchases if the vendor accepts cryptocurrencies, negating the need to convert into foreign exchange. Both factors suggest that cryptocurrencies can play a useful role in cross-border trade of goods or digital services.
“Since cryptocurrency holdings are largely anonymous, they can also provide privacy for some who wish to keep their asset holdings known only to themselves.
“Lastly, cryptocurrencies provide an insurance against possible operational failures of the financial system. Admittedly, this is a tail risk, but they could pose some concerns for citizens in emerging market countries with underdeveloped surveillance and policy institutions, or where damage from natural disasters can be exceedingly large. Conversely, a cryptocurrency network is expected to function continuously come what may, if they are broadly distributed across geographies and time zones.”
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.